Earlier this year, CMS updated the Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide Version 3.6 with a new section – Section 4.3. The language of that section seemed to require the submission of WCMSAs to CMS for review or be subject to certain consequences.
Industry reaction to that update was swift and loud. The subsequent CMS Town Hall included many objections from all parts of the industry, questioning both the lack of clarity and the validity of the new language.
If you’ll recall, shortly after the release of the new section I predicted that a “clarification of the clarification” would undoubtedly come quickly.
On March 15, 2022, CMS added the following language to Section 4.3 of the WCMSA Reference Guide:
“As a matter of policy and practice, CMS may at its sole discretion deny payment for medical services related to the WC injuries or illness, requiring attestation of appropriate exhaustion equal to the total settlement as defined in Section 10.5.3 of this reference guide, less procurement costs and paid conditional payments, before CMS will resume primary payment obligation for settled injuries or illnesses, unless it is shown, at the time of exhaustion of the MSA funds, that both the initial funding of the MSA was sufficient, and utilization of MSA funds was appropriate.”
This new language clearly implies the following:
- A WCMSA is NOT required to be submitted.
- A claimant will have the opportunity to demonstrate, upon exhaustion of an unsubmitted WCMSA, to demonstrate that (a) the initial funding was sufficient; and (b) the utilization of the funds was appropriate.
Now, although this additional language is helpful and far better than the previous version, it still begs one question: Isn’t an WCMSA that exhausts when further treatment is required related to the injury or condition that is the basis of the WCMSA, by definition, “insufficient”? I would assume that CMS’s standard for review of the WCMSA would likely be whether the exhausted WCMSA was created according to CMS’s guidelines. It would be interesting to see how an evidence-based WCMSA created in good faith (i.e., one NOT created according to CMS guidelines) would be treated by CMS and/or by court.
There were other minor adjustments to Section 4.3, but the changes above were the most important to note.
If you have any questions about this, feel free to call Greg Bashaw at CP Resolutions at 303-848-2834.